VAT on interstate transaction - E-1/E-2 sale

[K chandrakar]

we are in chhattisgarh our client in mumbai & supplier is also in mumbai. we placed an order to supplier to supply the consignment to our client of mumbai under 6(2) transection or sale in transit basis (E-1/E-2) basis. he is charging VAT for it. is it currect porcess. we are insisting him to dispatch the consignment against c form & but they are saying this is wrong process please explain it throurh proper notification & circular reference.

[Surender Gupta]

IT the occasion of movement of goods that determine the applicability of cst or local vat on the transaction of sale. If the movement of goods never be intended to be delivered out side the state of origin, the provisions of CST should not be attracted. But, my views are on the basis of basic understanding of the provisions of CST. You may approach an expert on this issue.

AI Summary

Interstate movement determines VAT or CST applicability; delivery intent governs tax treatment on E 1/E 2 sales. Applicability of VAT or CST on an E 1/E 2 sale hinges on intended movement of goods; when goods are not intended for delivery outside the state of origin, CST will generally not apply and local VAT will be attracted, affecting whether a C form should be sought or the supplier's VAT charge is appropriate.